Ring Energy, Inc. (NYSE American: REI) (“Ring” or the “Company”)
today reported operational and financial results for the second
quarter of 2023. In addition, the Company reaffirmed its pro forma
guidance for the third and fourth quarters of 2023 assuming
completion of its recently announced transaction to acquire
additional assets in the Central Basin Platform (“CBP”) of the
Permian Basin from Founders Oil & Gas IV, LLC (“Founders”) for
$75 million in cash, subject to customary closing adjustments (the
“Founders Acquisition”).
Second Quarter
2023 Highlights and Recent Key
Items
- Sold 17,271 barrels of oil
equivalent per day (“Boe/d”) (69% oil) compared to 18,292 Boe/d
(69% oil) for the first quarter of 2023;
- Primarily impacting sequential
quarterly sales volumes were the previously-announced sale of the
Company’s non-core asset position in the Delaware Basin, and the
deferral of certain well drilling and workover projects due to
lower commodity prices and the anticipated funding and incremental
benefits of the Founders Acquisition;
- Reported net income of $28.8
million, or $0.15 per diluted share, in the second quarter of 2023,
versus net income of $32.7 million, or $0.17 per diluted share in
the first quarter of 2023;
- Second quarter 2023 included a gain
on derivative contracts of $3.3 million, while first quarter
2023 included a gain on derivative contracts of
$9.5 million;
- Second quarter 2023 also included a
benefit from income taxes of $6.4 million primarily due to the
partial release of the valuation allowance. First quarter 2023
included a provision for income taxes of $2.0 million;
- Achieved Adjusted Net
Income¹ of $28.0 million, or $0.14 per diluted share, for the
second quarter of 2023 versus $25.0 million, or $0.13 per diluted
share, in the first quarter of 2023;
- Generated Adjusted EBITDA¹ of
$53.5 million for the second quarter of 2023 compared to
$58.6 million in the first quarter of 2023;
- Incurred Lease Operating Expense
(“LOE”) of $10.14 per Boe in the second quarter of 2023, which was
9% lower than the mid-point of guidance of $11.00 to $11.40 per Boe
and a 4% reduction from $10.61 per Boe the first quarter of
2023;
- Delivered Net Cash Provided by
Operating Activities of $43.4 million in the second quarter of
2023;
- Increased Adjusted Free Cash
Flow¹ by 20% to $12.6 million from $10.5 million in the first
quarter of 2023;
- Remained cash flow positive for the
15th consecutive quarter;
- Paid down $25.0 million in debt
during the second quarter of 2023;
- Ended second quarter 2023 with
liquidity of $204.0 million and a Leverage Ratio² of 1.64x;
- Reaffirmed borrowing base of $600
million under Ring’s $1.0 billion senior revolving credit facility
(the “Credit Facility”) during the second quarter of 2023;
- Continued the 2023 development
program, including drilling and completing four horizontal (“Hz”)
wells in the Northwest Shelf (“NWS”) and two vertical wells in the
CBP, as well as performed three recompletions in the CBP. Capital
expenditures were $31.6 million on an accrual basis during the
second quarter of 2023, which was 12% lower than the mid-point of
guidance of $34 million to $38 million;
- Completed the sale of its non-core
asset position in the West Texas Delaware Basin for net cash
proceeds of $8.0 million (the “Delaware Transaction”) during the
second quarter of 2023;
- Entered into agreements in April
2023 with certain holders of the Company’s outstanding warrants for
the early exercise of an aggregate of 14.5 million warrants (14.5
million shares of Common Stock) that resulted in net cash proceeds
of $8.7 million (the “Early Warrant Exercise”). As of June 30,
2023, 78,200 warrants to purchase shares of Ring’s Common Stock
remained outstanding;
- Announced on July 11, 2023 the
Company’s agreement to acquire the CBP assets of Founders for $75
million in cash with closing expected later this month and an
effective date of April 1, 2023; and
- Reiterated guidance for the third
and fourth quarters of 2023 based on its outlook for sales volumes,
operating expenses and capital spending, which assumes the
anticipated completion of the Founders Acquisition.
_________________________________¹ A non-GAAP financial measure;
see “Non-GAAP Information” section in this release for more
information including reconciliations to the most comparable GAAP
measures.² Refer to the “Non-GAAP Information” section in this
release for calculation of the Leverage Ratio based on our Credit
Agreement.
Mr. Paul D. McKinney, Chairman of the Board and
Chief Executive Officer, commented, “During the second quarter, we
benefited from the Stronghold acquisition executed in the second
half of 2022, continued strong performance from our legacy assets,
implemented our targeted 2023 capital spending program, and
continued ongoing efforts to drive further cost efficiencies in the
business. While second quarter sales volumes fell short of earlier
developed expectations due to a combination of factors, we were
pleased with our overall financial results despite the backdrop of
decreased realized oil and natural gas prices. This includes
posting a 20% sequential quarterly increase in Adjusted Free Cash
Flow. In addition to the increase in Adjusted Free Cash Flow, we
benefited from the sale of our non-core assets in the Delaware
Basin and the Early Warrant Exercise, which allowed us to pay down
$25 million of debt.”
Mr. McKinney continued, “We remain focused on
the disciplined execution of our 2023 capital spending program and
maximizing our Adjusted Free Cash Flow by prioritizing high
rate-of-return drilling and recompletion projects. In short, we
will continue to execute our value focused proven strategy designed
to further improve our balance sheet and position the Company to
return capital to stockholders in the future. To make our stock
more appealing to a wider cross-section of the investment
community, we believe achieving greater size and scale is a key
priority. As a result, pursuing immediately accretive and balance
sheet enhancing acquisition opportunities continues to be a core
focus.”
Mr. McKinney concluded, “We are excited by our
pending Founders transaction to acquire additional assets located
near our existing operations, where we are deeply familiar with the
operating and development characteristics. We look forward to
quickly integrating these assets into our operations after closing.
As we have previously stated, the Founders Acquisition is
immediately accretive, expands our proved reserves, lowers our
leverage ratio, accelerates our ability to pay down debt, increases
our inventory of low-risk and high rate-of-return drilling
locations, improves capital allocation flexibility, and
strategically expands our core operating area that allows us to
capture further operating and G&A cost synergies. We will
continue to pursue additional opportunities to strategically expand
our operational footprint.”
Financial Overview: For the
second quarter of 2023, the Company reported net income of $28.8
million, or $0.15 per diluted share, which included a $3.1 million
before-tax non-cash unrealized commodity derivative gain, $2.3
million in before-tax share-based compensation, and $0.2 million in
before-tax transaction related costs for the Delaware Transaction.
The Company’s Adjusted Net Income (which excludes the after-tax
impact of the adjustments) was $28.0 million, or $0.14 per diluted
share. In the first quarter of 2023, the Company reported net
income of $32.7 million, or $0.17 per diluted share, which included
a $10.1 million before-tax non-cash unrealized commodity derivative
gain and $1.9 million for before-tax share-based compensation. The
Company’s Adjusted Net Income for the first quarter of 2023 was
$25.0 million, or $0.13 per diluted share. For the second quarter
of 2022, Ring reported net income of $41.9 million, or $0.32 per
diluted share, which included a $12.2 million before-tax non-cash
unrealized commodity derivative gain and $1.9 million in before-tax
share-based compensation. Adjusted Net Income in the second quarter
of 2022 was $31.3 million, or $0.24 per diluted share.
Adjusted EBITDA was $53.5 million for the second
quarter of 2023 versus $58.6 million for the first quarter of 2023,
and 13% higher than $47.4 million for the second quarter of
2022.
Adjusted Free Cash Flow for the second quarter
of 2023 was $12.6 million, which was 20% higher than $10.5 million
for the first quarter of 2023. Positively impacting the current
period was a $7.3 million decrease in capital spending. Second
quarter 2023 Adjusted Free Cash Flow increased 405% over the same
period in 2022. Primarily contributing to the increase was $10.2
million in lower capital spending in the second quarter of
2023.
Adjusted Cash Flow from Operations was $44.0
million for the second quarter of 2023 compared to $49.4 million
for the first quarter of 2023 and $44.3 million for the second
quarter of 2022.
Adjusted Net Income, Adjusted EBITDA, Adjusted
Free Cash Flow, and Adjusted Cash Flow from Operations are non-GAAP
financial measures, which are described in more detail and
reconciled to the most comparable GAAP measures, in the tables
shown later in this release under “Non-GAAP Information.”
Sales Volumes, Prices and
Revenues: As previously disclosed, beginning July 1, 2022,
the Company began reporting revenues on a three-stream basis,
separately reporting oil, natural gas, and natural gas liquids
(“NGLs”) sales. For periods prior to July 1, 2022, sales and
reserve volumes, prices, and revenues for NGLs were included in
natural gas.
Sales volumes for the second quarter of 2023
were 17,271 Boe/d (69% oil, 16% natural gas and 15% NGLs), or
1,571,668 Boe, compared to 18,292 Boe/d (69% oil, 16% natural gas
and 15% NGLs), or 1,646,306 Boe, for the first quarter of 2023. As
noted above, second quarter 2023 sales volumes were below Ring’s
original guidance due to the previously announced sale of the
Company’s non-core Delaware Basin assets and the deferral of
certain drilling and workover projects due to lower commodity
prices and the anticipated funding and incremental benefits of the
Founders Acquisition. In the second quarter of 2022, sales volumes
were 9,341 Boe/d (86% oil and 14% natural gas), or 850,017 Boe.
Second quarter 2023 sales volumes were comprised of 1,079,379
barrels (“Bbls”) of oil, 1,557,545 thousand cubic feet (“Mcf”) of
natural gas and 232,698 Bbls of NGLs.
For the second quarter of 2023, the Company
realized an average sales price of $72.30 per barrel of crude oil,
$(0.71) per Mcf of natural gas and $10.35 per barrel of NGLs. The
combined average realized sales price for the period was $50.49 per
Boe, down 6% versus $53.50 per Boe for the first quarter of 2023,
and down 49% from $99.95 per Boe in the second quarter of 2022. The
average oil price differential the Company experienced from NYMEX
WTI futures pricing in the second quarter of 2023 was a negative
$1.77 per barrel of crude oil, while the average natural gas price
differential from NYMEX futures pricing was a negative $3.07 per
Mcf. The negative realized price of natural gas in the second
quarter of 2023 was driven by processing costs that exceeded Henry
Hub pricing less basis differentials.
Revenues were $79.3 million for the second
quarter of 2023 compared to $88.1 million for the first quarter of
2023 and $85.0 million for the second quarter of 2022. The 10%
decrease in second quarter 2023 revenues from the first quarter of
2023 was driven by lower realized pricing and sales volumes.
Lease Operating Expense
(“LOE”): LOE, which includes expensed workovers and
facilities maintenance, was $15.9 million, or $10.14 per Boe, in
the second quarter of 2023 versus $17.5 million, or $10.61 per Boe,
in the first quarter of 2023. LOE for the second quarter of 2022
was $8.3 million, or $9.77 per Boe. Contributing to the decrease in
absolute LOE from the first quarter was the sale of the Delaware
Basin assets and lower variable costs associated with reduced
production volumes. LOE for the second quarter of 2023 was below
the low end of guidance of $11.00 to $11.40 per BOE.
Gathering, Transportation and Processing
(“GTP”) Costs: As previously disclosed, due to a
contractual change effective May 1, 2022, the Company no longer
maintains ownership and control of natural gas through processing.
As a result, GTP costs are now reflected as a reduction to the
natural gas sales price and not as an expense item.
Ad Valorem Taxes: Ad valorem
taxes were $1.06 per Boe for the second quarter of 2023 compared to
$1.01 per Boe in the first quarter of 2023 and $1.12 per Boe for
the second quarter of 2022.
Production Taxes: Production
taxes were $2.55 per Boe in the second quarter of 2023 compared to
$2.68 per Boe in the first quarter of 2023 and $4.89 per Boe in
second quarter of 2022. Production taxes ranged between 4.9% to
5.1% of revenue for all three periods.
Depreciation, Depletion and Amortization
(“DD&A”) and Asset Retirement Obligation Accretion:
DD&A was $13.23 per Boe in the second quarter of 2023 versus
$12.92 per Boe for the first quarter of 2023 and $12.65 per Boe in
the second quarter of 2022. Asset retirement obligation accretion
was $0.23 per Boe in the second quarter of 2023 compared to $0.22
per Boe for the first quarter of 2023 and $0.22 per Boe in the
second quarter of 2022.
Operating Lease Expense:
Operating lease expense was $115,353 for the second quarter of
2023, $113,138 for the first quarter of 2023, and $83,590 in the
second quarter of 2022. These expenses are primarily associated
with the Company’s office leases.
General and Administrative Expenses
(“G&A”): G&A was $6.8 million ($4.33 per Boe) for
the second quarter of 2023 versus $7.1 million ($4.33 per Boe) for
the first quarter of 2023 and $5.8 million ($6.86 per Boe) for the
second quarter of 2022. G&A, excluding non-cash share-based
compensation, was $4.5 million ($2.89 per Boe) for the second
quarter of 2023 versus $5.2 million ($3.15 per Boe) for the first
quarter of 2023 and $3.9 million ($4.63 per Boe) for the second
quarter of 2022. G&A, excluding non-cash share-based
compensation and Delaware Transaction costs was $4.3 million ($2.75
per Boe), which represents a 13% and 41% respective decrease from
first quarter 2023 and second quarter 2022 on a per Boe basis.
Interest Expense: Interest
expense was $10.6 million in the second quarter of 2023 versus
$10.4 million for the first quarter of 2023 and $3.3 million for
the second quarter of 2022 due to increased borrowings and higher
interest rates.
Derivative (Loss) Gain: In the
second quarter of 2023, Ring recorded a net gain of $3.3 million on
its commodity derivative contracts, including a realized $0.2
million cash commodity derivative gain and an unrealized $3.1
million non-cash commodity derivative gain. This compares to a net
gain of $9.5 million in the first quarter of 2023, including a
realized $0.6 million cash commodity derivative loss and an
unrealized $10.1 million non-cash commodity derivative gain, and a
net loss on commodity derivative contracts of $7.4 million in the
second quarter of 2022, including a realized $19.6 million cash
commodity derivative loss and an unrealized $12.2 million non-cash
commodity derivative gain.
A summary listing of the Company’s outstanding
derivative positions at June 30, 2023 is included in the
tables shown later in this release.
For the remainder (July through December) of
2023, the Company has approximately 1.2 million barrels of oil
(approximately 52% of oil sales guidance midpoint) hedged and
approximately 1.3 billion cubic feet of natural gas (approximately
39% of natural gas sales guidance midpoint) hedged.
Income Tax: The Company
recorded a non-cash income tax benefit of $6.4 million in the
second quarter of 2023 versus a non-cash income tax provision of
$2.0 million in the first quarter of 2023 and a non-cash income tax
provision of $1.5 million for the second quarter of 2022. The
non-cash tax benefit in the second quarter of 2023 was primarily
due to the partial release of the valuation allowance.
Balance Sheet and Liquidity:
Total liquidity (defined as cash and cash equivalents plus
borrowing base availability) at the end of the second quarter of
2023 was $204.0 million, a 14% increase from March 31, 2023 and a
150% increase from June 30, 2022. Liquidity at June 30,
2023 consisted of cash and cash equivalents of $1.7 million and
$202.2 million of availability under Ring’s revolving credit
facility, which included a reduction of $0.8 million for letters of
credit. On June 30, 2023, the Company had $397.0 million in
borrowings outstanding on its Credit Facility that has a current
borrowing base of $600.0 million. Upon completion of the Founders
Acquisition, the Company is targeting further future debt reduction
dependent on market conditions, the timing and level of capital
spending, and other considerations.
Capital Expenditures: During
the second quarter of 2023, accrued capital expenditures were $31.6
million, which was below the low end of guidance of $34 million to
$38 million. In the NWS, the Company drilled and completed two
1.5-mile Hz wells (one with a working interest (“WI”) of 100% and
the other with a WI of 75.4%) and two 1-mile wells (both with a WI
of 91.1%). In the CBP, Ring drilled and completed two vertical
wells (both with a WI of 100%) and performed three vertical well
recompletions (each with a WI of 100%). Also included in capital
spending were costs for capital workovers, infrastructure upgrades,
and leasing costs.
Quarter |
|
Area |
|
Wells Drilled |
|
WellsCompleted |
|
Re-completions |
|
|
|
|
|
|
|
|
|
1Q 2023 |
|
Northwest Shelf |
|
4 |
|
4 |
|
— |
|
|
Central Basin Platform
(Vertical) |
|
3 |
|
3 |
|
6 |
|
|
Total |
|
7 |
|
7 |
|
6 |
|
|
|
|
|
|
|
|
|
2Q 2023 |
|
Northwest Shelf |
|
4 |
|
4 |
|
— |
|
|
Central Basin Platform
(Vertical) |
|
2 |
|
2 |
|
3 |
|
|
Total |
|
6 |
|
6 |
|
3 |
|
|
|
|
|
|
|
|
|
2023 Capital Investment, Sales Volumes,
and Operating Expense Guidance
For the second half of 2023, Ring reiterates the
pro forma third and fourth quarter of 2023 guidance provided on
July 11, 2023 that reflects the Delaware Transaction completed in
the second quarter and the positive impact from its pending
Founders Acquisition.
The Company is targeting total pro forma capital
expenditures in the second half of 2023 of $67 million to $77
million that includes a balanced and capital efficient combination
of drilling Hz and vertical wells, as well as performing
recompletions. Additionally, the capital spending program includes
funds for targeted capital workovers, infrastructure upgrades,
leasing costs, and non-operated drilling, completion, and capital
workovers.
All projects and estimates are based on assumed
WTI oil prices of $65 to $85 per barrel. As in the past, Ring has
designed its spending program with flexibility to respond to
changes in commodity prices and other market conditions as
appropriate.
Based on the $72 million mid-point of spending
guidance, the Company expects the following estimated allocation of
capital investments, including:
- 73% for drilling, completion, and
related infrastructure;
- 19% for recompletions and capital
workovers; and
- 8% for land, environmental and
safety, and non-operated capital.
The Company remains squarely focused on
continuing to generate Adjusted Free Cash Flow in 2023. All 2023
planned capital expenditures will be fully funded by cash on hand
and cash from operations, and excess Adjusted Free Cash Flow is
currently targeted for further debt reduction upon completion of
the Founders Acquisition.
The pro forma guidance in the table below
represents the Company's current good faith estimate of the range
of likely future results assuming a closing date for the Founders
Acquisition of August 15, 2023, and also reflect the Delaware
Transaction. Guidance could be affected by the factors discussed
below in the "Safe Harbor Statement" section.
|
|
PRO FORMA |
|
|
Q3 |
|
Q4 |
|
|
2023 |
|
2023 |
|
|
|
|
|
Sales
Volumes: |
|
|
|
|
Total (Boe/d) |
|
18,100 - 18,600 |
|
18,900 - 19,500 |
Mid Point (Boe/d) |
|
18,350 |
|
19,200 |
Oil (%) |
|
68% |
|
69% |
NGLs (%) |
|
15% |
|
15% |
Gas (%) |
|
17% |
|
16% |
|
|
|
|
|
Capital
Program: |
|
|
|
|
Capital spending(1)(millions) |
|
$37 - $42 |
|
$30 - $35 |
|
|
|
|
|
Hz wells drilled |
|
5 - 7 |
|
3 - 4 |
Vertical wells drilled |
|
1 - 2 |
|
3 - 4 |
Wells completed and online |
|
5 - 6 |
|
7 - 8 |
|
|
|
|
|
Operating
Expenses: |
|
|
|
|
LOE (per Boe) |
|
$10.50 - $11.00 |
|
$10.50 - $11.00 |
(1) In addition to Company-directed drilling and completion
activities, the capital spending outlook includes funds for
targeted well recompletions, capital workovers, and infrastructure
upgrades. Also included is anticipated spending for leasing costs,
and non-operated drilling, completion, and capital workovers. |
Conference Call Information
Ring will hold a conference call on Friday,
August 4, 2023 at 11:00 a.m. ET to discuss its second quarter 2023
operational and financial results. An updated investor presentation
will be posted to the Company’s website prior to the conference
call.
To participate in the conference call,
interested parties should dial 833-953-2433 at least five minutes
before the call is to begin. Please reference the “Ring Energy
Second Quarter 2023 Earnings Conference Call”. International
callers may participate by dialing 412-317-5762. The call will also
be webcast and available on Ring’s website at
www.ringenergy.com under “Investors” on the “News &
Events” page. An audio replay will also be available on the
Company’s website following the call.
About Ring Energy, Inc.
Ring Energy, Inc. is an oil and gas exploration,
development, and production company with current operations focused
on the development of its Permian Basin assets. For additional
information, please visit www.ringenergy.com.
Safe Harbor Statement
This release contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements involve a wide variety of risks
and uncertainties, and include, without limitation, statements with
respect to the Company’s strategy and prospects. The
forward-looking statements include statements about the expected
benefits of the Founders Acquisition to Ring and its stockholders,
the anticipated completion of the Founders Acquisition or the
timing thereof, the expected future reserves, production, financial
position, business strategy, revenues, earnings, costs, capital
expenditures and debt levels of the Company, and plans and
objectives of management for future operations. Forward-looking
statements are based on current expectations and assumptions and
analyses made by Ring and its management in light of their
experience and perception of historical trends, current conditions
and expected future developments, as well as other factors
appropriate under the circumstances. However, whether actual
results and developments will conform to expectations is subject to
a number of material risks and uncertainties, including but not
limited to: the ability to complete the Founders Acquisition on
anticipated terms and timetable; Ring’s ability to integrate its
combined operations successfully after the Founders Acquisition and
achieve anticipated benefits from it; the possibility that various
closing conditions for the Transaction may not be satisfied or
waived; risks relating to any unforeseen liabilities of Ring or
Founders; declines in oil, natural gas liquids or natural gas
prices; the level of success in exploration, development and
production activities; adverse weather conditions that may
negatively impact development or production activities; the timing
of exploration and development expenditures; inaccuracies of
reserve estimates or assumptions underlying them; revisions to
reserve estimates as a result of changes in commodity prices;
impacts to financial statements as a result of impairment
write-downs; risks related to level of indebtedness and periodic
redeterminations of the borrowing base and interest rates under the
Credit Facility; Ring’s ability to generate sufficient cash flows
from operations to meet the internally funded portion of its
capital expenditures budget; the impacts of hedging on results of
operations; and Ring’s ability to replace oil and natural gas
reserves. Such statements are subject to certain risks and
uncertainties which are disclosed in the Company’s reports filed
with the SEC, including its Form 10-K for the fiscal year ended
December 31, 2022, and its other filings. Ring undertakes no
obligation to revise or update publicly any forward-looking
statements except as required by law.
Contact Information
Al Petrie AdvisorsAl Petrie, Senior PartnerPhone:
281-975-2146Email: apetrie@ringenergy.com
RING ENERGY, INC.Condensed
Statements of Operations |
|
|
(Unaudited) |
|
(Unaudited) |
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
Oil, Natural Gas, and
Natural Gas Liquids Revenues |
|
$ |
79,348,573 |
|
|
$ |
88,082,912 |
|
|
$ |
84,961,875 |
|
|
$ |
167,431,485 |
|
|
$ |
153,142,907 |
|
|
|
|
|
|
|
|
|
|
|
|
Costs and Operating
Expenses |
|
|
|
|
|
|
|
|
|
|
Lease operating expenses |
|
|
15,938,106 |
|
|
|
17,472,691 |
|
|
|
8,301,443 |
|
|
|
33,410,797 |
|
|
|
17,254,608 |
|
Gathering, transportation and processing costs |
|
|
(1,632 |
) |
|
|
(823 |
) |
|
|
549,389 |
|
|
|
(2,455 |
) |
|
|
1,846,247 |
|
Ad valorem taxes |
|
|
1,670,343 |
|
|
|
1,670,613 |
|
|
|
949,239 |
|
|
|
3,340,956 |
|
|
|
1,901,193 |
|
Oil and natural gas production taxes |
|
|
4,012,139 |
|
|
|
4,408,140 |
|
|
|
4,157,457 |
|
|
|
8,420,279 |
|
|
|
7,375,819 |
|
Depreciation, depletion and amortization |
|
|
20,792,932 |
|
|
|
21,271,671 |
|
|
|
10,749,204 |
|
|
|
42,064,603 |
|
|
|
20,530,491 |
|
Asset retirement obligation accretion |
|
|
353,878 |
|
|
|
365,847 |
|
|
|
186,303 |
|
|
|
719,725 |
|
|
|
374,545 |
|
Operating lease expense |
|
|
115,353 |
|
|
|
113,138 |
|
|
|
83,590 |
|
|
|
228,491 |
|
|
|
167,180 |
|
General and administrative expense |
|
|
6,810,243 |
|
|
|
7,130,139 |
|
|
|
5,832,302 |
|
|
|
13,940,382 |
|
|
|
11,354,579 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Costs and Operating Expenses |
|
|
49,691,362 |
|
|
|
52,431,416 |
|
|
|
30,808,927 |
|
|
|
102,122,778 |
|
|
|
60,804,662 |
|
|
|
|
|
|
|
|
|
|
|
|
Income from
Operations |
|
|
29,657,211 |
|
|
|
35,651,496 |
|
|
|
54,152,948 |
|
|
|
65,308,707 |
|
|
|
92,338,245 |
|
|
|
|
|
|
|
|
|
|
|
|
Other Income
(Expense) |
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
79,745 |
|
|
|
— |
|
|
|
— |
|
|
|
79,745 |
|
|
|
— |
|
Interest (expense) |
|
|
(10,550,807 |
) |
|
|
(10,390,279 |
) |
|
|
(3,279,299 |
) |
|
|
(20,941,086 |
) |
|
|
(6,677,660 |
) |
Gain (loss) on derivative contracts |
|
|
3,264,660 |
|
|
|
9,474,905 |
|
|
|
(7,457,018 |
) |
|
|
12,739,565 |
|
|
|
(35,053,159 |
) |
Gain (loss) on disposal of assets |
|
|
(132,109 |
) |
|
|
— |
|
|
|
— |
|
|
|
(132,109 |
) |
|
|
— |
|
Other income |
|
|
116,610 |
|
|
|
9,600 |
|
|
|
— |
|
|
|
126,210 |
|
|
|
— |
|
Net Other Income (Expense) |
|
|
(7,221,901 |
) |
|
|
(905,774 |
) |
|
|
(10,736,317 |
) |
|
|
(8,127,675 |
) |
|
|
(41,730,819 |
) |
|
|
|
|
|
|
|
|
|
|
|
Income Before Benefit
from (Provision for) Income Taxes |
|
|
22,435,310 |
|
|
|
34,745,722 |
|
|
|
43,416,631 |
|
|
|
57,181,032 |
|
|
|
50,607,426 |
|
|
|
|
|
|
|
|
|
|
|
|
Benefit from
(Provision for) Income Taxes |
|
|
6,356,295 |
|
|
|
(2,029,943 |
) |
|
|
(1,472,209 |
) |
|
|
4,326,352 |
|
|
|
(1,550,961 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net
Income |
|
$ |
28,791,605 |
|
|
$ |
32,715,779 |
|
|
$ |
41,944,422 |
|
|
$ |
61,507,384 |
|
|
$ |
49,056,465 |
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings per
share |
|
$ |
0.15 |
|
|
$ |
0.18 |
|
|
$ |
0.39 |
|
|
$ |
0.33 |
|
|
$ |
0.47 |
|
Diluted Earnings per
share |
|
$ |
0.15 |
|
|
$ |
0.17 |
|
|
$ |
0.32 |
|
|
$ |
0.32 |
|
|
$ |
0.39 |
|
|
|
|
|
|
|
|
|
|
|
|
Basic Weighted-Average Shares
Outstanding |
|
|
193,077,859 |
|
|
|
177,984,323 |
|
|
|
106,390,776 |
|
|
|
185,545,775 |
|
|
|
103,291,669 |
|
Diluted Weighted-Average
Shares Outstanding |
|
|
195,866,533 |
|
|
|
190,138,969 |
|
|
|
130,597,589 |
|
|
|
193,023,966 |
|
|
|
126,251,705 |
|
RING ENERGY, INC.Condensed Operating
Data(Unaudited) |
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
volumes: |
|
|
|
|
|
|
|
|
|
|
Oil (Bbls) |
|
|
1,079,379 |
|
|
|
1,139,413 |
|
|
|
729,484 |
|
|
|
2,218,792 |
|
|
|
1,405,699 |
|
Natural gas (Mcf) |
|
|
1,557,545 |
|
|
|
1,601,407 |
|
|
|
723,196 |
|
|
|
3,158,952 |
|
|
|
1,455,479 |
|
Natural gas liquids (Bbls)(1) |
|
|
232,698 |
|
|
|
239,992 |
|
|
|
— |
|
|
|
472,690 |
|
|
|
— |
|
Total oil, natural gas and natural gas liquids (Boe)(1)(2) |
|
|
1,571,668 |
|
|
|
1,646,306 |
|
|
|
850,017 |
|
|
|
3,217,974 |
|
|
|
1,648,279 |
|
% Oil |
|
|
69 |
% |
|
|
69 |
% |
|
|
86 |
% |
|
|
69 |
% |
|
|
85 |
% |
|
|
|
|
|
|
|
|
|
|
|
Average daily equivalent sales
(Boe/d) |
|
|
17,271 |
|
|
|
18,292 |
|
|
|
9,341 |
|
|
|
17,779 |
|
|
|
9,107 |
|
|
|
|
|
|
|
|
|
|
|
|
Average realized sales
prices: |
|
|
|
|
|
|
|
|
|
|
Oil ($/Bbl) |
|
$ |
72.30 |
|
|
$ |
73.36 |
|
|
$ |
109.24 |
|
|
$ |
72.85 |
|
|
$ |
101.81 |
|
Natural gas ($/Mcf) |
|
|
(0.71 |
) |
|
|
0.66 |
|
|
|
7.29 |
|
|
|
(0.01 |
) |
|
|
6.89 |
|
Natural gas liquids ($/Bbls)(1) |
|
|
10.35 |
|
|
|
14.30 |
|
|
|
— |
|
|
|
12.35 |
|
|
|
— |
|
Barrel of oil equivalent ($/Boe) |
|
$ |
50.49 |
|
|
$ |
53.50 |
|
|
$ |
99.95 |
|
|
$ |
52.03 |
|
|
$ |
92.91 |
|
|
|
|
|
|
|
|
|
|
|
|
Average costs and
expenses per Boe ($/Boe): |
|
|
|
|
|
|
|
|
|
|
Lease operating expenses |
|
$ |
10.14 |
|
|
$ |
10.61 |
|
|
$ |
9.77 |
|
|
$ |
10.38 |
|
|
$ |
10.47 |
|
Gathering, transportation and processing costs |
|
|
— |
|
|
|
— |
|
|
|
0.65 |
|
|
|
— |
|
|
|
1.12 |
|
Ad valorem taxes |
|
|
1.06 |
|
|
|
1.01 |
|
|
|
1.12 |
|
|
|
1.04 |
|
|
|
1.15 |
|
Oil and natural gas production taxes |
|
|
2.55 |
|
|
|
2.68 |
|
|
|
4.89 |
|
|
|
2.62 |
|
|
|
4.47 |
|
Depreciation, depletion and amortization |
|
|
13.23 |
|
|
|
12.92 |
|
|
|
12.65 |
|
|
|
13.07 |
|
|
|
12.46 |
|
Asset retirement obligation accretion |
|
|
0.23 |
|
|
|
0.22 |
|
|
|
0.22 |
|
|
|
0.22 |
|
|
|
0.23 |
|
Operating lease expense |
|
|
0.07 |
|
|
|
0.07 |
|
|
|
0.10 |
|
|
|
0.07 |
|
|
|
0.10 |
|
General and administrative expense (including share-based
compensation) |
|
|
4.33 |
|
|
|
4.33 |
|
|
|
6.86 |
|
|
|
4.33 |
|
|
|
6.89 |
|
G&A (excluding share-based compensation) |
|
|
2.89 |
|
|
|
3.15 |
|
|
|
4.63 |
|
|
|
3.03 |
|
|
|
4.81 |
|
G&A (excluding share-based compensation and transaction
costs) |
|
|
2.75 |
|
|
|
3.15 |
|
|
|
4.63 |
|
|
|
2.96 |
|
|
|
4.81 |
|
(1) Beginning July 1, 2022, revenues were reported on a
three-stream basis, separately reporting crude oil, natural gas,
and natural gas liquids volumes and sales. For periods prior to
July 1, 2022, volumes and sales for natural gas liquids were
presented with natural gas.(2) Boe is determined using the ratio of
six Mcf of natural gas to one Bbl of oil (totals may not compute
due to rounding.) The conversion ratio does not assume price
equivalency and the price on an equivalent basis for oil, natural
gas, and natural gas liquids may differ significantly. |
RING ENERGY, INC.Condensed Balance
Sheets |
|
|
(Unaudited) |
|
|
|
|
June 30, 2023 |
|
December 31, 2022 |
ASSETS |
|
|
|
|
Current
Assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
1,749,975 |
|
|
$ |
3,712,526 |
|
Accounts receivable |
|
|
32,044,159 |
|
|
|
42,448,719 |
|
Joint interest billing
receivables, net |
|
|
2,617,815 |
|
|
|
983,802 |
|
Derivative assets |
|
|
8,307,537 |
|
|
|
4,669,162 |
|
Inventory |
|
|
7,327,295 |
|
|
|
9,250,717 |
|
Prepaid expenses and other
assets |
|
|
3,061,216 |
|
|
|
2,101,538 |
|
Total Current
Assets |
|
|
55,107,997 |
|
|
|
63,166,464 |
|
Properties and
Equipment |
|
|
|
|
Oil and natural gas
properties, full cost method |
|
|
1,524,510,887 |
|
|
|
1,463,838,595 |
|
Financing lease asset subject
to depreciation |
|
|
3,144,038 |
|
|
|
3,019,476 |
|
Fixed assets subject to
depreciation |
|
|
2,762,370 |
|
|
|
3,147,125 |
|
Total Properties and
Equipment |
|
|
1,530,417,295 |
|
|
|
1,470,005,196 |
|
Accumulated depreciation,
depletion and amortization |
|
|
(331,153,213 |
) |
|
|
(289,935,259 |
) |
Net Properties and
Equipment |
|
|
1,199,264,082 |
|
|
|
1,180,069,937 |
|
Operating lease asset |
|
|
1,628,832 |
|
|
|
1,735,013 |
|
Derivative assets |
|
|
10,555,937 |
|
|
|
6,129,410 |
|
Deferred financing costs |
|
|
15,458,204 |
|
|
|
17,898,973 |
|
Total
Assets |
|
$ |
1,282,015,052 |
|
|
$ |
1,268,999,797 |
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
Current
Liabilities |
|
|
|
|
Accounts payable |
|
$ |
90,021,106 |
|
|
$ |
111,398,268 |
|
Income tax liability |
|
|
98,481 |
|
|
|
— |
|
Financing lease liability |
|
|
761,110 |
|
|
|
709,653 |
|
Operating lease liability |
|
|
394,404 |
|
|
|
398,362 |
|
Derivative liabilities |
|
|
7,848,580 |
|
|
|
13,345,619 |
|
Notes payable |
|
|
1,412,674 |
|
|
|
499,880 |
|
Deferred cash payment |
|
|
— |
|
|
|
14,807,276 |
|
Asset retirement
obligations |
|
|
408,958 |
|
|
|
635,843 |
|
Total Current
Liabilities |
|
|
100,945,313 |
|
|
|
141,794,901 |
|
|
|
|
|
|
Non-current
Liabilities |
|
|
|
|
Deferred income taxes |
|
|
4,074,183 |
|
|
|
8,499,016 |
|
Revolving line of credit |
|
|
397,000,000 |
|
|
|
415,000,000 |
|
Financing lease liability,
less current portion |
|
|
765,753 |
|
|
|
1,052,479 |
|
Operating lease liability,
less current portion |
|
|
1,263,936 |
|
|
|
1,473,897 |
|
Derivative liabilities |
|
|
10,829,096 |
|
|
|
10,485,650 |
|
Asset retirement
obligations |
|
|
28,296,455 |
|
|
|
29,590,463 |
|
Total
Liabilities |
|
|
543,174,736 |
|
|
|
607,896,406 |
|
Commitments and
contingencies |
|
|
|
|
Stockholders'
Equity |
|
|
|
|
Preferred stock - $0.001 par
value; 50,000,000 shares authorized; no shares issued or
outstanding |
|
|
— |
|
|
|
— |
|
Common stock - $0.001 par
value; 450,000,000 shares authorized; 195,350,672 shares and
175,530,212 shares issued and outstanding, respectively |
|
|
195,350 |
|
|
|
175,530 |
|
Additional paid-in
capital |
|
|
791,450,835 |
|
|
|
775,241,114 |
|
Accumulated deficit |
|
|
(52,805,869 |
) |
|
|
(114,313,253 |
) |
Total Stockholders’
Equity |
|
|
738,840,316 |
|
|
|
661,103,391 |
|
Total Liabilities and
Stockholders' Equity |
|
$ |
1,282,015,052 |
|
|
$ |
1,268,999,797 |
|
RING ENERGY, INC.Condensed Statements of
Cash
Flows(Unaudited) |
|
|
(Unaudited) |
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows From
Operating Activities |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
28,791,605 |
|
|
$ |
32,715,779 |
|
|
$ |
41,944,422 |
|
|
$ |
61,507,384 |
|
|
$ |
49,056,465 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization |
|
|
20,792,932 |
|
|
|
21,271,671 |
|
|
|
10,749,203 |
|
|
|
42,064,603 |
|
|
|
20,530,490 |
|
Asset retirement obligation accretion |
|
|
353,878 |
|
|
|
365,847 |
|
|
|
186,303 |
|
|
|
719,725 |
|
|
|
374,545 |
|
Amortization of deferred financing costs |
|
|
1,220,385 |
|
|
|
1,220,384 |
|
|
|
189,274 |
|
|
|
2,440,769 |
|
|
|
388,548 |
|
Share-based compensation |
|
|
2,260,312 |
|
|
|
1,943,696 |
|
|
|
1,899,245 |
|
|
|
4,204,008 |
|
|
|
3,421,155 |
|
Bad debt expense |
|
|
19,315 |
|
|
|
2,894 |
|
|
|
— |
|
|
|
22,209 |
|
|
|
— |
|
Deferred income tax expense (benefit) |
|
|
(6,548,363 |
) |
|
|
1,972,653 |
|
|
|
1,485,022 |
|
|
|
(4,575,710 |
) |
|
|
1,550,961 |
|
Excess tax expense (benefit) related to share-based
compensation |
|
|
150,877 |
|
|
|
— |
|
|
|
— |
|
|
|
150,877 |
|
|
|
— |
|
(Gain) loss on derivative contracts |
|
|
(3,264,660 |
) |
|
|
(9,474,905 |
) |
|
|
7,457,018 |
|
|
|
(12,739,565 |
) |
|
|
35,053,159 |
|
Cash received (paid) for derivative settlements, net |
|
|
179,595 |
|
|
|
(658,525 |
) |
|
|
(19,617,265 |
) |
|
|
(478,930 |
) |
|
|
(33,732,766 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
5,320,051 |
|
|
|
3,428,287 |
|
|
|
(4,315,730 |
) |
|
|
8,748,338 |
|
|
|
(14,393,828 |
) |
Inventory |
|
|
1,480,824 |
|
|
|
442,598 |
|
|
|
— |
|
|
|
1,923,422 |
|
|
|
— |
|
Prepaid expenses and other assets |
|
|
(1,489,612 |
) |
|
|
529,934 |
|
|
|
(2,470,602 |
) |
|
|
(959,678 |
) |
|
|
(2,267,717 |
) |
Accounts payable |
|
|
(5,471,391 |
) |
|
|
(9,589,898 |
) |
|
|
4,328,968 |
|
|
|
(15,061,289 |
) |
|
|
6,847,979 |
|
Settlement of asset retirement obligation |
|
|
(429,567 |
) |
|
|
(490,319 |
) |
|
|
(1,113,208 |
) |
|
|
(919,886 |
) |
|
|
(1,666,576 |
) |
Net Cash Provided by Operating Activities |
|
|
43,366,181 |
|
|
|
43,680,096 |
|
|
|
40,722,650 |
|
|
|
87,046,277 |
|
|
|
65,162,415 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows From
Investing Activities |
|
|
|
|
|
|
|
|
|
|
Payments for the Stronghold Acquisition |
|
|
— |
|
|
|
(18,511,170 |
) |
|
|
— |
|
|
|
(18,511,170 |
) |
|
|
— |
|
Payments to purchase oil and natural gas properties |
|
|
(819,644 |
) |
|
|
(59,099 |
) |
|
|
(383,003 |
) |
|
|
(878,743 |
) |
|
|
(743,851 |
) |
Payments to develop oil and natural gas properties |
|
|
(35,611,915 |
) |
|
|
(36,939,307 |
) |
|
|
(35,793,923 |
) |
|
|
(72,551,222 |
) |
|
|
(49,654,172 |
) |
Payments to acquire or improve fixed assets subject to
depreciation |
|
|
(11,324 |
) |
|
|
(14,570 |
) |
|
|
(81,646 |
) |
|
|
(25,894 |
) |
|
|
(91,760 |
) |
Sale of fixed assets subject to depreciation |
|
|
332,230 |
|
|
|
— |
|
|
|
126,100 |
|
|
|
332,230 |
|
|
|
134,600 |
|
Proceeds from divestiture of equipment for oil and natural gas
properties |
|
|
— |
|
|
|
54,558 |
|
|
|
25,066 |
|
|
|
54,558 |
|
|
|
25,066 |
|
Receipt from sale of Delaware properties |
|
|
7,992,917 |
|
|
|
— |
|
|
|
— |
|
|
|
7,992,917 |
|
|
|
— |
|
Net Cash (Used in) Investing Activities |
|
|
(28,117,736 |
) |
|
|
(55,469,588 |
) |
|
|
(36,107,406 |
) |
|
|
(83,587,324 |
) |
|
|
(50,330,117 |
) |
|
|
|
|
|
|
|
|
|
|
|
Cash Flows From
Financing Activities |
|
|
|
|
|
|
|
|
|
|
Proceeds from revolving line of credit |
|
|
28,500,000 |
|
|
|
56,000,000 |
|
|
|
40,500,000 |
|
|
|
84,500,000 |
|
|
|
50,500,000 |
|
Payments on revolving line of credit |
|
|
(53,500,000 |
) |
|
|
(49,000,000 |
) |
|
|
(50,500,000 |
) |
|
|
(102,500,000 |
) |
|
|
(70,500,000 |
) |
Proceeds from issuance of common stock from warrant exercises |
|
|
8,687,655 |
|
|
|
3,613,941 |
|
|
|
5,163,126 |
|
|
|
12,301,596 |
|
|
|
5,163,126 |
|
Payments for taxes withheld on vested restricted shares, net |
|
|
(141,682 |
) |
|
|
(134,381 |
) |
|
|
(257,694 |
) |
|
|
(276,063 |
) |
|
|
(257,694 |
) |
Proceeds from notes payable |
|
|
1,565,071 |
|
|
|
— |
|
|
|
928,626 |
|
|
|
1,565,071 |
|
|
|
928,626 |
|
Payments on notes payable |
|
|
(152,397 |
) |
|
|
(499,880 |
) |
|
|
(253,360 |
) |
|
|
(652,277 |
) |
|
|
(620,741 |
) |
Payment of deferred financing costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Reduction of financing lease liabilities |
|
|
(182,817 |
) |
|
|
(177,014 |
) |
|
|
(111,864 |
) |
|
|
(359,831 |
) |
|
|
(230,642 |
) |
Net Cash Provided by (Used in) Financing
Activities |
|
|
(15,224,170 |
) |
|
|
9,802,666 |
|
|
|
(4,531,166 |
) |
|
|
(5,421,504 |
) |
|
|
(15,017,325 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net Increase
(Decrease) in Cash |
|
|
24,275 |
|
|
|
(1,986,826 |
) |
|
|
84,078 |
|
|
|
(1,962,551 |
) |
|
|
(185,027 |
) |
Cash at Beginning of
Period |
|
|
1,725,700 |
|
|
|
3,712,526 |
|
|
|
2,139,211 |
|
|
|
3,712,526 |
|
|
|
2,408,316 |
|
Cash at End of
Period |
|
$ |
1,749,975 |
|
|
$ |
1,725,700 |
|
|
$ |
2,223,289 |
|
|
$ |
1,749,975 |
|
|
$ |
2,223,289 |
|
RING ENERGY, INC.Financial Commodity
Derivative PositionsAs of June 30,
2023 |
The following tables reflect the details of current derivative
contracts as of June 30, 2023 (Quantities are in barrels (Bbl)
for the oil derivative contracts and in million British thermal
units (MMBtu) for the natural gas derivative contracts.): |
|
|
Oil Hedges (WTI) |
|
|
Q3 2023 |
|
Q4 2023 |
|
Q1 2024 |
|
Q2 2024 |
|
Q3 2024 |
|
Q4 2024 |
|
Q1 2025 |
|
Q2 2025 |
|
Q3 2025 |
|
Q4 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Swaps: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedged volume (Bbl) |
|
|
181,700 |
|
|
138,000 |
|
|
170,625 |
|
|
156,975 |
|
|
282,900 |
|
|
368,000 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
Weighted average swap
price |
|
$ |
74.19 |
|
$ |
74.52 |
|
$ |
67.40 |
|
$ |
66.40 |
|
$ |
65.49 |
|
$ |
68.43 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred premium
puts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedged volume (Bbl) |
|
|
230,000 |
|
|
165,600 |
|
|
45,500 |
|
|
45,500 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
Weighted average strike
price |
|
$ |
80.47 |
|
$ |
83.78 |
|
$ |
84.70 |
|
$ |
82.80 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
Weighted average deferred
premium price |
|
$ |
10.60 |
|
$ |
14.61 |
|
$ |
17.15 |
|
$ |
17.49 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Two-way
collars: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedged volume (Bbl) |
|
|
211,163 |
|
|
274,285 |
|
|
339,603 |
|
|
325,847 |
|
|
230,000 |
|
|
128,800 |
|
|
474,750 |
|
|
464,100 |
|
|
— |
|
|
— |
Weighted average put
price |
|
$ |
55.56 |
|
$ |
56.73 |
|
$ |
64.20 |
|
$ |
64.30 |
|
$ |
64.00 |
|
$ |
60.00 |
|
$ |
57.06 |
|
$ |
60.00 |
|
$ |
— |
|
$ |
— |
Weighted average call
price |
|
$ |
69.25 |
|
$ |
70.77 |
|
$ |
79.73 |
|
$ |
79.09 |
|
$ |
76.50 |
|
$ |
73.24 |
|
$ |
75.82 |
|
$ |
69.85 |
|
$ |
— |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-way
collars: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedged volume (Bbl) |
|
|
16,242 |
|
|
15,598 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
Weighted average first put
price |
|
$ |
45.00 |
|
$ |
45.00 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
Weighted average second put
price |
|
$ |
55.00 |
|
$ |
55.00 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
Weighted average call
price |
|
$ |
80.05 |
|
$ |
80.05 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
Gas Hedges (Henry Hub) |
|
|
Q3 2023 |
|
Q4 2023 |
|
Q1 2024 |
|
Q2 2024 |
|
Q3 2024 |
|
Q4 2024 |
|
Q1 2025 |
|
Q2 2025 |
|
Q3 2025 |
|
Q4 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NYMEX
Swaps: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedged volume (MMBtu) |
|
|
144,781 |
|
|
203,706 |
|
|
152,113 |
|
|
138,053 |
|
|
121,587 |
|
|
644,946 |
|
|
616,199 |
|
|
591,725 |
|
|
— |
|
|
— |
Weighted average swap
price |
|
$ |
3.36 |
|
$ |
3.35 |
|
$ |
3.62 |
|
$ |
3.61 |
|
$ |
3.59 |
|
$ |
4.45 |
|
$ |
3.78 |
|
$ |
3.43 |
|
$ |
— |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Two-way
collars: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedged volume (MMBtu) |
|
|
404,421 |
|
|
579,998 |
|
|
591,500 |
|
|
568,750 |
|
|
552,000 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
Weighted average put
price |
|
$ |
3.17 |
|
$ |
3.15 |
|
$ |
4.00 |
|
$ |
4.00 |
|
$ |
4.00 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
Call hedged volume
(MMBtu) |
|
|
404,421 |
|
|
579,998 |
|
|
591,500 |
|
|
568,750 |
|
|
552,000 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
Weighted average call
price |
|
$ |
4.55 |
|
$ |
4.50 |
|
$ |
6.29 |
|
$ |
6.29 |
|
$ |
6.29 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
Oil Hedges (basis differential) |
|
|
Q3 2023 |
|
Q4 2023 |
|
Q1 2024 |
|
Q2 2024 |
|
Q3 2024 |
|
Q4 2024 |
|
Q1 2025 |
|
Q2 2025 |
|
Q3 2025 |
|
Q4 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Argus basis
swaps: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedged volume (MMBtu) |
|
|
305,000 |
|
|
460,000 |
|
|
364,000 |
|
|
364,000 |
|
|
368,000 |
|
|
368,000 |
|
|
270,000 |
|
|
273,000 |
|
|
276,000 |
|
|
276,000 |
Weighted average spread
price(1) |
|
$ |
1.10 |
|
$ |
1.10 |
|
$ |
1.15 |
|
$ |
1.15 |
|
$ |
1.15 |
|
$ |
1.15 |
|
$ |
1.00 |
|
$ |
1.00 |
|
$ |
1.00 |
|
$ |
1.00 |
|
|
Gas Hedges (basis differential) |
|
|
Q3 2023 |
|
Q4 2023 |
|
Q1 2024 |
|
Q2 2024 |
|
Q3 2024 |
|
Q4 2024 |
|
Q1 2025 |
|
Q2 2025 |
|
Q3 2025 |
|
Q4 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Waha basis
swaps: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedged volume (MMBtu) |
|
|
332,855 |
|
|
324,021 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
Weighted average spread
price(1) |
|
$ |
0.55 |
|
$ |
0.55 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
El Paso Permian Basin
basis swaps: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedged volume (MMBtu) |
|
|
329,529 |
|
|
459,683 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
Weighted average spread
price(1) |
|
$ |
0.63 |
|
$ |
0.63 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
(1) The oil basis swap hedges are calculated as the fixed price
(weighted average spread price above) less the difference between
WTI Midland and WTI Cushing, in the issue of Argus Americas Crude.
The gas basis swap hedges are calculated as the Henry Hub natural
gas price less the fixed amount specified as the weighted average
spread price above. |
RING ENERGY, INC.
Non-GAAP Information
Certain financial information included in this
release are not measures of financial performance recognized by
accounting principles generally accepted in the United States
(“GAAP”). These non-GAAP financial measures are “Adjusted Net
Income”, “Adjusted EBITDA”, “Adjusted Free Cash Flow” or “AFCF,”
“Adjusted Cash Flow from Operations” or “ACFFO,” “G&A Excluding
Share-Based Compensation” “G&A Excluding Share-Based
Compensation and Transaction Costs,” and “Leverage Ratio.”
Management uses these non-GAAP financial measures in its analysis
of performance. In addition, Adjusted EBITDA is a key metric used
to determine the Company’s incentive compensation awards. These
disclosures may not be viewed as a substitute for results
determined in accordance with GAAP and are not necessarily
comparable to non-GAAP performance measures which may be reported
by other companies.
Reconciliation of Net Income to Adjusted
Net Income
“Adjusted Net Income” is calculated as Net
Income minus the estimated after-tax impact of share-based
compensation, ceiling test impairment, unrealized gains and losses
on changes in the fair value of derivatives, and related
transaction costs. Adjusted Net Income is presented because the
timing and amount of these items cannot be reasonably estimated and
affect the comparability of operating results from period to
period, and current period to prior periods. The Company believes
that the presentation of Adjusted Net Income provides useful
information to investors as it is one of the metrics management
uses to assess the Company’s ongoing operating and financial
performance, and also is a useful metric for investors to compare
our results with our peers.
|
|
(Unaudited for All Periods) |
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
|
Total |
|
Per share - diluted |
|
Total |
|
Per share - diluted |
|
Total |
|
Per share - diluted |
|
Total |
|
Per share - diluted |
|
Total |
|
Per share - diluted |
Net Income |
|
$ |
28,791,605 |
|
|
$ |
0.15 |
|
|
$ |
32,715,779 |
|
|
$ |
0.17 |
|
|
$ |
41,944,422 |
|
|
$ |
0.32 |
|
|
$ |
61,507,384 |
|
|
$ |
0.32 |
|
|
$ |
49,056,465 |
|
|
$ |
0.39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation |
|
|
2,260,312 |
|
|
|
0.01 |
|
|
|
1,943,696 |
|
|
|
0.01 |
|
|
|
1,899,245 |
|
|
|
0.01 |
|
|
|
4,204,008 |
|
|
|
0.02 |
|
|
|
3,421,155 |
|
|
|
0.03 |
|
Unrealized loss (gain) on
change in fair value of derivatives |
|
|
(3,085,065 |
) |
|
|
(0.02 |
) |
|
|
(10,133,430 |
) |
|
|
(0.05 |
) |
|
|
(12,160,246 |
) |
|
|
(0.09 |
) |
|
|
(13,218,495 |
) |
|
|
(0.07 |
) |
|
|
1,320,393 |
|
|
|
0.01 |
|
Transaction costs - executed
A&D |
|
|
220,191 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
220,191 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Tax impact on adjusted
items |
|
|
(171,282 |
) |
|
|
— |
|
|
|
478,467 |
|
|
|
— |
|
|
|
(347,939 |
) |
|
|
— |
|
|
|
307,185 |
|
|
|
— |
|
|
|
145,314 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net
Income |
|
$ |
28,015,761 |
|
|
$ |
0.14 |
|
|
$ |
25,004,512 |
|
|
$ |
0.13 |
|
|
$ |
31,335,482 |
|
|
$ |
0.24 |
|
|
$ |
53,020,273 |
|
|
$ |
0.27 |
|
|
$ |
53,943,327 |
|
|
$ |
0.43 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Weighted-Average
Shares Outstanding |
|
|
195,866,533 |
|
|
|
|
|
190,138,969 |
|
|
|
|
|
130,597,589 |
|
|
|
|
|
193,023,966 |
|
|
|
|
|
126,251,705 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income
per Diluted Share |
|
$ |
0.14 |
|
|
|
|
$ |
0.13 |
|
|
|
|
$ |
0.24 |
|
|
|
|
$ |
0.27 |
|
|
|
|
$ |
0.43 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income to Adjusted
EBITDA
The Company defines “Adjusted EBITDA” as net
income (loss) plus net interest expense, unrealized loss (gain) on
change in fair value of derivatives, ceiling test impairment,
income tax (benefit) expense, depreciation, depletion and
amortization, asset retirement obligation accretion, transaction
costs for executed acquisitions and divestitures (A&D),
share-based compensation, loss (gain) on disposal of assets, and
backing out the effect of other income. Company management believes
Adjusted EBITDA is relevant and useful because it helps investors
understand Ring’s operating performance and makes it easier to
compare its results with those of other companies that have
different financing, capital and tax structures. Adjusted EBITDA
should not be considered in isolation from or as a substitute for
net income, as an indication of operating performance or cash flows
from operating activities or as a measure of liquidity. Adjusted
EBITDA, as Ring calculates it, may not be comparable to Adjusted
EBITDA measures reported by other companies. In addition, Adjusted
EBITDA does not represent funds available for discretionary
use.
|
|
(Unaudited for All Periods) |
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net
Income |
|
$ |
28,791,605 |
|
|
$ |
32,715,779 |
|
|
$ |
41,944,422 |
|
|
$ |
61,507,384 |
|
|
$ |
49,056,465 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
10,471,062 |
|
|
|
10,390,279 |
|
|
|
3,279,299 |
|
|
|
20,861,341 |
|
|
|
6,677,660 |
|
Unrealized loss (gain) on change in fair value of derivatives |
|
|
(3,085,065 |
) |
|
|
(10,133,430 |
) |
|
|
(12,160,246 |
) |
|
|
(13,218,495 |
) |
|
|
1,320,393 |
|
Income tax (benefit) expense |
|
|
(6,356,295 |
) |
|
|
2,029,943 |
|
|
|
1,472,209 |
|
|
|
(4,326,352 |
) |
|
|
1,550,961 |
|
Depreciation, depletion and amortization |
|
|
20,792,932 |
|
|
|
21,271,671 |
|
|
|
10,749,204 |
|
|
|
42,064,603 |
|
|
|
20,530,491 |
|
Asset retirement obligation accretion |
|
|
353,878 |
|
|
|
365,847 |
|
|
|
186,303 |
|
|
|
719,725 |
|
|
|
374,545 |
|
Transaction costs - executed A&D |
|
|
220,191 |
|
|
|
— |
|
|
|
— |
|
|
|
220,191 |
|
|
|
— |
|
Share-based compensation |
|
|
2,260,312 |
|
|
|
1,943,696 |
|
|
|
1,899,245 |
|
|
|
4,204,008 |
|
|
|
3,421,155 |
|
Loss (gain) on disposal of assets |
|
|
132,109 |
|
|
|
— |
|
|
|
— |
|
|
|
132,109 |
|
|
|
— |
|
Other income |
|
|
(116,610 |
) |
|
|
(9,600 |
) |
|
|
— |
|
|
|
(126,210 |
) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
|
$ |
53,464,119 |
|
|
$ |
58,574,185 |
|
|
$ |
47,370,436 |
|
|
$ |
112,038,304 |
|
|
$ |
82,931,670 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin |
|
|
67 |
% |
|
|
66 |
% |
|
|
56 |
% |
|
|
67 |
% |
|
|
54 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliations of Net Cash Provided by
Operating Activities to Adjusted Free Cash Flow and Adjusted EBITDA
to Adjusted Free Cash Flow
The Company defines “Adjusted Free Cash Flow” or
“AFCF” as Net Cash Provided by Operating Activities less changes in
operating assets and liabilities (as reflected on our statements of
cash flows); plus transaction costs for executed acquisitions and
divestitures; current tax expense (benefit); proceeds from
divestitures of equipment for oil and natural gas properties; loss
(gain) on disposal of assets; and less capital expenditures; bad
debt expense; and other income. For this purpose, our definition of
capital expenditures includes costs incurred related to oil and
natural gas properties (such as drilling and infrastructure costs
and the lease maintenance costs) but excludes acquisition costs of
oil and gas properties from third parties that are not included in
our capital expenditures guidance provided to investors. Our
management believes that Adjusted Free Cash Flow is an important
financial performance measure for use in evaluating the performance
and efficiency of our current operating activities after the impact
of accrued capital expenditures and net interest expense and
without being impacted by items such as changes associated with
working capital, which can vary substantially from one period to
another. Other companies may use different definitions of Adjusted
Free Cash Flow.
|
|
(Unaudited for All Periods) |
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Provided by
Operating Activities |
|
$ |
43,366,181 |
|
|
$ |
43,680,096 |
|
|
$ |
40,722,650 |
|
|
$ |
87,046,277 |
|
|
$ |
65,162,415 |
|
Adjustments - Condensed Statements of Cash Flows |
|
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities |
|
|
589,695 |
|
|
|
5,679,398 |
|
|
|
3,570,574 |
|
|
|
6,269,093 |
|
|
|
11,480,143 |
|
Transaction Costs - executed A&D |
|
|
220,191 |
|
|
|
— |
|
|
|
— |
|
|
|
220,191 |
|
|
|
— |
|
Income tax expense (benefit) - current |
|
|
41,191 |
|
|
|
57,290 |
|
|
|
(12,813 |
) |
|
|
98,481 |
|
|
|
— |
|
Capital expenditures |
|
|
(31,608,483 |
) |
|
|
(38,925,497 |
) |
|
|
(41,810,442 |
) |
|
|
(70,533,980 |
) |
|
|
(61,554,135 |
) |
Proceeds from divestiture of equipment for oil and natural
gasproperties |
|
|
— |
|
|
|
54,558 |
|
|
|
25,066 |
|
|
|
54,558 |
|
|
|
25,066 |
|
Bad debt expense |
|
|
(19,315 |
) |
|
|
(2,894 |
) |
|
|
— |
|
|
|
(22,209 |
) |
|
|
— |
|
Loss (gain) on disposal of assets |
|
|
132,109 |
|
|
|
— |
|
|
|
— |
|
|
|
132,109 |
|
|
|
— |
|
Other income |
|
|
(116,610 |
) |
|
|
(9,600 |
) |
|
|
— |
|
|
|
(126,210 |
) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Free Cash
Flow |
|
$ |
12,604,959 |
|
|
$ |
10,533,351 |
|
|
$ |
2,495,035 |
|
|
$ |
23,138,310 |
|
|
$ |
15,113,489 |
|
|
|
(Unaudited for All Periods) |
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
|
$ |
53,464,119 |
|
|
$ |
58,574,185 |
|
|
$ |
47,370,436 |
|
|
$ |
112,038,304 |
|
|
$ |
82,931,670 |
|
|
|
|
|
|
|
|
|
|
|
|
Net interest expense (excluding amortization of deferred financing
costs) |
|
|
(9,250,677 |
) |
|
|
(9,169,895 |
) |
|
|
(3,090,025 |
) |
|
|
(18,420,572 |
) |
|
|
(6,289,112 |
) |
Capital expenditures |
|
|
(31,608,483 |
) |
|
|
(38,925,497 |
) |
|
|
(41,810,442 |
) |
|
|
(70,533,980 |
) |
|
|
(61,554,135 |
) |
Proceeds from divestiture of equipment for oil and natural gas
properties |
|
|
— |
|
|
|
54,558 |
|
|
|
25,066 |
|
|
|
54,558 |
|
|
|
25,066 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Free Cash
Flow |
|
$ |
12,604,959 |
|
|
$ |
10,533,351 |
|
|
$ |
2,495,035 |
|
|
$ |
23,138,310 |
|
|
$ |
15,113,489 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Cash Provided by
Operating Activities to Adjusted Cash Flow from
Operations
The Company defines “Adjusted Cash Flow from
Operations” or “ACFFO” as Net Cash Provided by Operating
Activities, per the Condensed Statements of Cash Flows, less the
changes in operating assets and liabilities, including accounts
receivable, inventory, prepaid expenses and other assets, accounts
payable, and settlement of asset retirement obligation, which are
subject to variation due to the nature of the Company’s operations.
Accordingly, the Company believes this non-GAAP measure is useful
to investors because it is used often in its industry and allows
investors to compare this metric to other companies in its peer
group as well as the E&P sector.
|
|
(Unaudited for All Periods) |
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Provided by
Operating Activities |
|
$ |
43,366,181 |
|
|
$ |
43,680,096 |
|
|
$ |
40,722,650 |
|
|
$ |
87,046,277 |
|
|
$ |
65,162,415 |
|
|
|
|
|
|
|
|
|
|
|
|
Changes in operating assets
and liabilities |
|
|
589,695 |
|
|
|
5,679,398 |
|
|
|
3,570,572 |
|
|
|
6,269,093 |
|
|
|
11,480,143 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Cash Flow
from Operations |
|
$ |
43,955,876 |
|
|
$ |
49,359,494 |
|
|
$ |
44,293,222 |
|
|
$ |
93,315,370 |
|
|
$ |
76,642,558 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of General and
Administrative Expense (G&A) to G&A Excluding Share-Based
Compensation and Transaction Costs
|
|
(Unaudited for All Periods) |
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative expense (G&A) |
|
$ |
6,810,243 |
|
|
$ |
7,130,139 |
|
|
$ |
5,832,302 |
|
|
$ |
13,940,382 |
|
|
$ |
11,354,579 |
|
Shared-based compensation |
|
|
2,260,312 |
|
|
|
1,943,696 |
|
|
|
1,899,245 |
|
|
|
4,204,008 |
|
|
|
3,421,155 |
|
G&A excluding
share-based compensation |
|
|
4,549,931 |
|
|
|
5,186,443 |
|
|
|
3,933,057 |
|
|
|
9,736,374 |
|
|
|
7,933,424 |
|
Transaction costs - executed
A&D |
|
|
220,191 |
|
|
|
— |
|
|
|
— |
|
|
|
220,191 |
|
|
|
— |
|
G&A excluding
share-based compensation and transaction costs |
|
$ |
4,329,740 |
|
|
$ |
5,186,443 |
|
|
$ |
3,933,057 |
|
|
$ |
9,516,183 |
|
|
$ |
7,933,424 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of Leverage
Ratio
“Leverage” or the “Leverage Ratio” is calculated
under our existing senior revolving credit facility and means as of
any date, the ratio of (i) our consolidated total debt as of such
date to (ii) our Consolidated EBITDAX for the four consecutive
fiscal quarters ending on or immediately prior to such date for
which financial statements are required to have been delivered
under our existing senior revolving credit facility; provided that
for the purposes of the definition of ‘Leverage Ratio’, (a) for the
fiscal quarter ended September 30, 2022, Consolidated EBITDAX is
calculated by multiplying Consolidated EBITDAX for such fiscal
quarter by four, (b) for the fiscal quarter ended December 31,
2022, Consolidated EBITDAX is calculated by multiplying
Consolidated EBITDAX for the two fiscal quarter period ended on
December 31, 2022 by two, (c) for the fiscal quarter ended March
31, 2023, Consolidated EBITDAX is calculated by multiplying
Consolidated EBITDAX for the three fiscal quarter period ended on
March 31, 2023 by four-thirds, and (d) for each fiscal quarter
thereafter, Consolidated EBITDAX will be calculated by adding
Consolidated EBITDAX for the four consecutive fiscal quarters
ending on such date.
The Company defines “Consolidated EBITDAX” in
accordance with our existing senior revolving credit facility and
it means for any period an amount equal to the sum of (i)
consolidated net income for such period plus (ii) to the extent
deducted in determining consolidated net income for such period,
and without duplication, (A) consolidated interest expense, (B)
income tax expense determined on a consolidated basis in accordance
with GAAP, (C) depreciation, depletion and amortization determined
on a consolidated basis in accordance with GAAP, (D) exploration
expenses determined on a consolidated basis in accordance with
GAAP, and (E) all other non-cash charges acceptable to our senior
revolving credit facility administrative agent determined on a
consolidated basis in accordance with GAAP, in each case for such
period minus (iii) all noncash income added to consolidated net
income for such period; provided that, for purposes of calculating
compliance with the financial covenants set forth in our senior
revolving credit facility, to the extent that during such period we
shall have consummated an acquisition permitted by the senior
revolving credit facility or any sale, transfer or other
disposition of any person, business, property or assets permitted
by the senior revolving credit facility, Consolidated EBITDAX will
be calculated on a pro forma basis with respect to such person,
business, property or assets so acquired or disposed of.
Also set forth in our existing senior revolving
credit facility is the maximum permitted Leverage Ratio of 3.00.
The following table shows the leverage ratio calculation for the
Company’s most recent fiscal quarter.
|
|
(Unaudited) |
|
|
Three Months Ended |
|
|
|
|
September 30, |
|
December 31, |
|
March 31, |
|
June 30, |
|
Last FourQuarters |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2023 |
|
|
Consolidated EBITDAX
Calculation: |
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) |
|
$ |
75,085,891 |
|
|
$ |
14,492,669 |
|
|
$ |
32,715,779 |
|
|
$ |
28,791,605 |
|
|
$ |
151,085,944 |
|
Plus: Interest expense |
|
|
7,021,381 |
|
|
|
9,468,688 |
|
|
|
10,390,279 |
|
|
|
10,550,807 |
|
|
|
37,431,155 |
|
Plus: Income tax provision
(benefit) |
|
|
4,315,783 |
|
|
|
2,541,980 |
|
|
|
2,029,943 |
|
|
|
(6,356,295 |
) |
|
|
2,531,411 |
|
Plus: Depreciation, depletion
and amortization |
|
|
14,324,502 |
|
|
|
20,885,774 |
|
|
|
21,271,671 |
|
|
|
20,792,932 |
|
|
|
77,274,879 |
|
Plus: non-cash charges
acceptable to Administrative Agent |
|
|
(45,926,132 |
) |
|
|
7,962,406 |
|
|
|
(7,823,887 |
) |
|
|
(470,875 |
) |
|
|
(46,258,488 |
) |
Consolidated
EBITDAX |
|
$ |
54,821,425 |
|
|
$ |
55,351,517 |
|
|
$ |
58,583,785 |
|
|
$ |
53,308,174 |
|
|
$ |
222,064,901 |
|
Plus: Pro Forma Acquired
Consolidated EBITDAX |
|
$ |
22,486,182 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
22,486,182 |
|
Less: Pro Forma Divested
Consolidated EBITDAX |
|
|
(355,824 |
) |
|
|
(507,709 |
) |
|
|
(683,723 |
) |
|
|
(201,859 |
) |
|
$ |
(1,749,115 |
) |
Pro Forma Consolidated
EBITDAX |
|
$ |
76,951,783 |
|
|
$ |
54,843,808 |
|
|
$ |
57,900,062 |
|
|
$ |
53,106,315 |
|
|
$ |
242,801,968 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash charges acceptable to
Administrative Agent |
|
|
|
|
|
|
|
|
|
|
Asset retirement obligation
accretion |
|
$ |
243,140 |
|
|
$ |
365,747 |
|
|
$ |
365,847 |
|
|
$ |
353,878 |
|
|
|
Unrealized loss (gain) on
derivative assets |
|
|
(47,712,305 |
) |
|
|
5,398,615 |
|
|
|
(10,133,430 |
) |
|
|
(3,085,065 |
) |
|
|
Share-based compensation |
|
|
1,543,033 |
|
|
|
2,198,044 |
|
|
|
1,943,696 |
|
|
|
2,260,312 |
|
|
|
Total non-cash charges
acceptable to Administrative Agent |
|
$ |
(45,926,132 |
) |
|
$ |
7,962,406 |
|
|
$ |
(7,823,887 |
) |
|
$ |
(470,875 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of |
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
Leverage Ratio Covenant: |
|
|
|
|
|
|
|
|
|
|
Total Debt |
|
$ |
397,000,000 |
|
|
|
|
|
|
|
|
|
Pro Forma Consolidated
EBITDAX |
|
$ |
242,801,968 |
|
|
|
|
|
|
|
|
|
Leverage
Ratio |
|
|
1.64 |
|
|
|
|
|
|
|
|
|
Maximum Allowed |
|
≤ 3.00x |
|
|
|
|
|
|
|
|
Ring Energy (AMEX:REI)
Historical Stock Chart
From Jun 2024 to Jul 2024
Ring Energy (AMEX:REI)
Historical Stock Chart
From Jul 2023 to Jul 2024